Broadcast Vendor-Provided Professional Services

The broadcast industry continues evolve. As a result the vendors serving this dynamic industry are also expanding their capabilities to include professional services. This white paper highlights the market trends and challenges facing broadcast vendors.

Transcript of "Broadcast Vendor-Provided Professional Services"

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INTRODUCTION Vendors serving the broadcast markets have been undergoing a dramatic shift in their product and service offerings over the past decade. While these companies achieved recognition for products to capture, manage, process, and deliver broadcast content, the proprietary products of the past have given way to software-­‐based solutions run on industry-­‐standard servers. As a result, the service offerings from these companies have shifted as well. Vendors have had to improve their customer support offerings, enabling some level of customer self-­‐service while providing process improvements to fulfill customer need for rapid problem resolution. In addition, professional services, which had been the domain of independent local system integrators, have become a strategic differentiator for many product vendors. This analysis will present market trends and customer perspectives leveraging leading industry research reports, competitive reviews and vendor interviews. The analysis took place from March-­‐May 2012, assessing alignment of defined customer needs versus actual customer investment. MAD Perspectives engaged in discussion with broadcast vendors, broadcast companies, industry consultants and analysts to validate key trends as well as market perceptions regarding professional services providers. This analysis incorporates content reflecting publically available data regarding key offerings from identified vendors serving the broadcast market. The intent of this analysis is to baseline the current state of professional services in the broadcast market and rationalizes the professional services growth opportunity for broadcast vendors. ABOUT MAD PERSPECTIVES LLC. MAD Perspectives is passionate about digital media and the technologies that are shifting the way that businesses communicate and collaborate to accomplish business goals. MAD Perspectives leverages 25+ years of corporate business experience to assess business needs, define strategy, develop solution selling and relevant go-­‐to-­‐market models and create effective communications. Founder Peggy Dau, has spent the last 10 years identifying trends, opportunities and solutions surrounding the delivery, management and consumption of premium digital media content. Since founding MAD Perspectives in 2009, Peggy has consulted for high-­‐tech companies and broadcast vendors serving the media and entertainment industry. MAD tracks market trends and emerging technologies while making the connection between business goals and relevant solutions to define new ways of achieving success.

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MARKET OVERVIEW The constant evolution of the broadcast market has resulted in a greater number of participants from both the customer and vendor perspectives. Improved network capacity has opened the door for broadcast content consumption via devices never before considered to provide viable alternatives to TV. At the same time, companies known for aggregating content are now becoming producers (e.g., Google/YouTube). These shifts present opportunities for product vendors and professional services firms, even as they create greater competition and introduce new challenges for traditional broadcasters. Figure 1: Market Shifts Create Opportunities Broadcasters have been facing relevancy challenges as online news aggregators and social media networks deliver news in real-­‐time. In most cases, broadcasters have elected to brand their own online and social channels. This has introduced the need for incremental resources to produce content for these channels and manage interaction with consumers. Broadcast journalists are now not only expected to uncover and share the news on-­‐air, they are also expected to interact with viewers. In addition, for the first time, broadcasters are able to get instantaneous feedback related to programming, content and presentation. These pressures are forcing broadcasters to prioritize solutions simplifying content production and streamlining workflow, while enabling the introduction of content from non-­‐traditional sources (e.g., social media) and the simultaneous distribution of content across a variety of networks to an even greater number of devices. As the number of broadcasters and content producers increase (e.g., local stations, religious organizations, educational institutions, online services, corporations), so do the range of requirements. Technology purchase decisions are no longer solely feature/functionality based, but incorporate a broader set of business needs, including: revenue generation, business process, total cost of ownership, return on investment, time to market and, perhaps most importantly, risk mitigation. Add to this that broadcasting is an industry in which the technology itself is transitioning from purpose-­‐built hardware to software-­‐based solutions leveraging industry-­‐standard IT servers. The relevance and need for consulting and professional services to define pragmatic solutions, improve operational efficiency and increase monetization opportunities has never been higher.

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Customers are seeking hardware, software and services to address the infrastructure requirements supporting their most basic business goals: revenue generation and cost mitigation. Figure 2: Customer Solution Drivers In fact, the Devoncroft Big Broadcast Survey has found a disparity between the prioritization of industry trends and actual spending by broadcasters. The 2011 survey indicated multi-­‐channel content delivery as the trend most broadcasters were talking about, yet their project dollars were spent on HD upgrades. This anomaly can be attributed to the competitive need to provide HD content to consumers and the challenges surrounding multi-­‐channel content delivery. Without addressing the internal workflows necessary to prepare content for delivery in different formats, customers cannot pursue solutions to simplify distribution and delivery. This is where consultants are stepping in to help broadcasters understand the dependencies and interconnectivity between a variety of technology, process and human resource topics. As this industry continues to adapt to consumer demands, new market participants and ever-­‐evolving technology, the opportunities to advise, design and deploy will continue to grow. The choice is to be a vendor providing products where the most differentiating factor is increasingly price rather than features and functionality or to provide differentiation through the delivery of solution-­‐centric professional services. CUSTOMER REQUIREMENTS In speaking with broadcasters, the terms ”systems integration,” “professional services” and “consulting” are used interchangeably. The overall market definition of systems integration includes construction and cabling of physical studios, in addition to the deployment of cameras, routers, switchers, control room automation, etc. Customers interviewed during this analysis have narrowed their definition to represent the implementation of integrated technologies supporting a defined workflow environment. The expectations for vendors providing professional services are: • Integration of vendor and third-­‐party products, including those from competitors

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• Robust project management capabilities, with a project team comprised of customer, vendor and/or third-­‐party engineers • Interoperability testing, including upfront advice as to products already tested and the conditions recommended for optimal use • Collaborative deployment model (e.g., working side-­‐by-­‐side with customer engineers to educate them during deployment as to nuances of the systems being integrated) • Knowledge of systems and workflows, anticipating customer challenges and requirements • Capability, process and methodology to mitigate customer risk Demand for services to define, plan, design, implement, integrate, test and deploy is on the rise as broadcasters address challenges to utilize infrastructure more effectively while accessing new markets via new distribution channels. “Professional services” or “consulting services” are widely defined by customers as any services providing assistance in educating, formulating and architecting solutions. These services can be provided by broadcast or IT vendors, hardware or software suppliers or pure system integrators. Customers are seeking assistance from vendors who define a vision to support company strategy and turn that vision into a functional design. They recognize a lack of in-­‐house knowledge when it comes to designing complex systems, particularly those that integrate multiple functions across many departments. Broadcasters demand partners who can analyze their unique needs and architect integrated, best-­‐of-­‐breed solutions that are customized to their specific requirements. As broadcasters plan for next generation services, they hope to “leapfrog” to cutting edge technology that will address their growth requirements. Professional services providers must be able to address not only current needs, but provide the roadmap as to how technology will address future demands. They must be able to reflect market knowledge from both a business and technology perspective and define an implementation plan that mitigates risk. Vendors who can address both business and technology needs, in a partnership model of shared risk, stand to gain the most traction. Customers are not only seeking advice as to the most relevant technology, they are pursuing insight into new business models, go-­‐to-­‐market channels and revenue streams. Customers are asking consultants to assess organizational structure as related to business process and identify areas for operational efficiencies. They want to understand the risks and benefits of insourcing or outsourcing parts of their workflows. Customer perception of consultants generally leans towards recognizing that these consultants may not have a deep knowledge of broadcast technology, but that they understand business operations. Customer perception is won through successful engagement. The key capabilities broadcasters are seeking from professional services vendors are: • Broadcast market knowledge (business vision, respect for broadcast transition, technology products and trends) • Agnostic approach to products, focus on functionality • Business modeling, workflow analysis, new service definition • Validation of product/system interoperability

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• Addressing business continuity from a broadcast environment perspective • Defined project management methodology relevant to the industry Each type of integrator brings its own competencies to the table. While the broadcast vendors have intimate knowledge of the technologies and business challenges facing the industry, broadcast and IT system integrators bring unique competencies to transform business and technology operations that the broadcast vendors have not yet achieved. Knowledge built from deploying products throughout broadcast operations gives broadcast vendors a strong entry point for offering professional services. Those vendors that can separate solution recommendations from product sales will earn deeper customer relationships, which will result in increased product sales. Broadcast vendors can learn from their agnostic competitors in how they lead with their professional services to address business, function and technology requirements. MARKET PARTICIPANTS Systems integration has long been a challenge in the broadcast space. The complexity of functions performed within a broadcast operation raises challenges for performance and consistency. There are many vendors providing products that address specific needs, while competing at the high and low ends of the market. Customers seek integrators with the ability to combine systems from different vendors, creating cohesive end-­‐to-­‐end workflows from acquisition to production, playout and distribution. Challenges arise when one vendor upgrades its product without validating continued interoperability with other vendor products. There are several types of vendors providing professional services in the broadcast space. They can be categorized as: • Broadcast Vendors, who provide services to install, commission and integrate their products • Broadcast System Integrators, who combine technology and business experience specific to the broadcast industry to envision, design, implement and integrate solutions • IT System Integrators, who use business requirements to define technology solutions facilitating content monetization, operational efficiency and business agility Broadcast vendors have inconsistently enriched their service capabilities by offering professional services. The vendors that do offer professional services reflect their capabilities using terms common to all consultants and system integrators. The question is in the maturity level of their services. Maturity comes from definition and use of consistent processes and methodologies. It is also present in the experience of the project managers, solution architects and system engineers.

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VENDOR PROFILES We spoke with EVS, Grass Valley, and Harmonic. Each of these vendors has been providing products to the broadcast industry for over 15 years. More interestingly, each of these vendors has increased its focus on its professional services organization in the past year or two. Consistently, each vendor indicated that customers were pursuing vendor-­‐provided professional services to help with the following: 1. Software-­‐Centric Products. The increasing volume of software-­‐based products, installed on industry standard servers, has reduced total cost of ownership and simplified upgrade paths and workflow integration. However, customers do require assistance to install, configure and customize software to meet their specific requirements. In addition, these products introduce new concerns for managing security, performance, scalability and usability. 2. Augment In-­‐House Expertise: Many solutions used in the broadcast industry were developed in-­‐house, and broadcaster staff often had the expertise to create customized solutions to augment or integrate existing functionality provided by broadcast vendor products. With the shift to software-­‐based products, budget pressures reducing engineering and operations headcount and a focus on using existing headcount to support revenue-­‐generating activities, broadcasters simply don’t have the knowledge or the bandwidth to handle product implementations. 3. Mitigate Risk: While products have become less complex to install, they have become more complicated to use and manage as part of an integrated workflow. Broadcasters are seeking assistance to define the end-­‐to-­‐end architecture, validate interoperability between products and manage the overall implementation. A single project manager will establish the project plan, working with each vendor to ensure the implementation stays on schedule and within budget. 4. Training: Due to the complexity (or “flexibility”) of software-­‐based products, in-­‐house staff requires training on both the technical and operational aspects of the products. Vendors must develop providing a combination of onsite and online training to educate managers and users of the systems. Each vendor’s strategy is aligned with core competencies, corporate initiatives and a recognition that products alone do not fulfill customer need.

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http://www.evs.tv EVS has recognized that the days of interconnecting cables and creating customized products are over, and that the market is demanding solutions that can easily adapt to any customer’s specific requirements. Not only are their customers seeking flexibility in how solutions can be deployed, they demand that vendors provide the resources to implement the solution in their environment. EVS’ strategy is to listen to their customers and understand how they wish to use a product then use their professional services team to implement the solution in the manner desired by the customer. This results in customized software deployments with key features that are rolled into future product releases. EVS professional services then provide the required training to optimize customer use of the configured solution. “With roots in live sports broadcast, EVS’ strategy has focused on three key attributes; reliability, modular systems and responsive support. Viewer behavior has dramatically changed the broadcast landscape with an ongoing shift in how and where content is consumed. EVS is helping industry professionals monetize their content through tangible and flexible media solutions.” Johann Schreurs, EVS General Manager New Media Broadcast EVS’ professional services team is growing. EVS sees this team as key part of its strategy to make its customers happy. EVS has prioritized customer satisfaction as it expands its professional services capabilities. The team provides a new way to deliver solutions and interact with customers. Opportunities are pursued directly as well as through partnerships with global or local system integrators. With the customer at the center of its strategy, EVS is positioned for increased revenue from both products and services.

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http://www.grassvalley.com Grass Valley continues to evolve its service offerings, despite its spin-­‐off from Thompson/Technicolor. Professional Services are a key element of their strategy to be a trusted partner to their customers. Drawing on its history of product innovation and ability to adapt in a rapidly changing industry, they recognize the need to deliver services addressing the transactional and transformational needs of their customers. Grass Valley is providing services to define and deploy both product led and industry specific solutions. Their solutions reflect the company’s strengths in live production, news and playout. Grass Valley recognizes the growth and value provided by its software solutions. However, they also recognize the challenge this represents to their customers. Software based solutions introduce new concerns related to security, performance, interoperability and usability. As a result, they have developed services to manage, secure and optimize their hardware and software products -­‐ all focused on improving the customer experience. Grass Valley is taking advantage of regional strengths and sharing knowledge globally to create a comprehensive and consistent professional services offer. This includes a go-­‐to-­‐market model that includes services partners. "Most broadcasters have a wealth of experience in traditional broadcasting, however increasingly the introduction of disruptive technology and competition from new entrants is leading them to seek greater support from their suppliers to ensure swift secure implementations. At Grass Valley we have embraced this need and seek to provide our customers with complementary skills that de-­‐risk projects and speed up implementation." Marcos Gonzalez-­‐Flower, Grass Valley VP EMEA Services Grass Valley continues to invest in a robust training program targeting customers and partners. This demonstrates their clear understanding of the customers’ mandates for both operational and technical knowledge as a key component for success. Grass Valley’s focus on governance, training and solutions represent a strategy recognizing customer need for technology expertise that goes beyond the product itself

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www.harmonicinc.com Harmonic has realized that leading with solutions rather than individual products opens the door for a wider conversation with customers. With products across the digital video value chain, they are focused on differentiation through providing customers with solutions greater than the sum of their parts. Harmonic, in listening to its customers, has realized that their customers are willing to pay for services if they understand the benefit. In most cases, their customers reflect the ongoing trend of reduced engineering resources or resources without the knowledge to implement today’s network-­‐oriented or software based products. Harmonic is committed to growing its Professional Services team. However, they recognize the internal cultural challenge of shifting the mindset of a product company to understand the value of services. They are addressing this hurdle through close alignment with product teams, facilitating new product introductions with complementary and differentiating services and showcasing customer value achieved through solution sales. “Professional services are a key element in leveraging the strength of the broad Harmonic product and technology portfolio to provide comprehensive solutions for our customers.” Alex Derecho, Harmonic VP Professional Services Harmonic’s go-­‐to-­‐market model is a solution sale that incorporates products, networking and services. The services component includes implementation, integration, testing and training. They often pursue a “Proof-­‐of-­‐Concept” model that allows them to prove the feasibility of their proposed solutions. In their customer engagements, they focus on the customer’s business priorities and the end-­‐to-­‐end requirements to achieve them.

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PROFESSIONAL SERVICES BEST PRACTICES As broadcasters pursue and implement new solutions to drive revenue and reduce costs, they are faced with multiple alternatives when selecting professional services providers. As broadcast vendors enhance their services capabilities, they should strive to attain the perceived maturity level of their system integrator competitors/partners. • DEFINE PROJECT MANAGEMENT METHODOLOGY • DEVELOP CONSISTENT DEAL PURSUIT, REVIEW & PRICING MODELGOVERNANCE • IMPLEMENT GLOBAL KNOWLEDGE MANAGEMENT • CREATE CONSISTENT & COMPREHENSIVE DOCUMENTATION • CONTINUOUSLY DEVELOP INTERNAL & EXTERNAL TRAINING • PACKAGE PRODUCT-­‐LED SOLUTIONS FOR CONSISTENT, PREDICTABLE DELIVERY • PURSUE COMPLEX TRANSFORMATIONAL SOLUTIONS ALIGNED WITH INDUSTRY STRENGTHS GO-­‐TO-­‐MARKET • RECOGNIZE CUSTOMER GOALS AND/OR LIMITATIONS AND PROMOTE SOLUTIONS ACCORDINGLY • FORMALIZE STRATEGIC PARTNERSHIPS TO AUGMENT TECHNOLOGY CAPABILITIES AND GLOBAL REACH CONCLUSION Given the complex nature of broadcast operations, it is natural that the global market reflects a high number of niche system integrators. The IABM identifies more than fifty independent vendors supporting broadcast needs in specific countries or regions. The maturity and capabilities of these integrators reflects the nature of the broadcast markets in which they reside. Countries with mature broadcasters are focused on managing transitions (HD, tapeless workflow) and introduction of new channels. However, less-­‐developed countries are seeking complete facility build out. In both cases, the requirement for agnostic consulting and design provides the competitive differentiation for niche SIs versus their broadcast vendor partners. The value each these vendors brings to their customers will continue to evolve and shift based on market need. The ongoing adoption of IT-­‐based solutions will allow IT vendors to increase their penetration across all segments of the digital media lifecycle. The challenge for broadcast vendors is to increase the value associated with the services they provide. If these vendors want to become true partners to their customers, they must provide services that may start with product integration, but must evolve to address wider requirements. As broadcasters face increasing pressure to streamline operations, services have become more important as a means to mitigate or share risk. More importantly for vendors, these services provide them with incremental differentiation in a market with increasingly commoditized products. Professional service providers must rise to the challenge of fulfilling both business and technology issues related to increased revenue, improved employee productivity, operational efficiency and future-­‐proof technology.